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Do the poor benefit from globalization regardless of institutional quality?

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Author

Summary, in English

Despite significant progress towards the Millennium goals, more than one billion people live on less than 1.25 US dollars per day. Previous research suggests that globalization stimulates poverty reduction, but does not investigate what role institutions play in this relationship. Theoretically, globalization could act as either a complement or a substitute to institutional quality in reducing poverty. We find that the poverty-reducing effect of globalization is stronger when institutions are weak. In particular, increasing social globalization reduces poverty more when corruption is high and democratic accountability is low. Thus, globalization has the power to reduce poverty even in countries with low institutional quality.

Publishing year

2016

Language

English

Pages

702-712

Publication/Series

Applied Economics Letters

Volume

23

Issue

10

Document type

Journal article

Publisher

Routledge

Topic

  • Economics

Keywords

  • Absolute poverty
  • globalization
  • institutions
  • information flows
  • D30
  • F15
  • I32

Status

Published

ISBN/ISSN/Other

  • ISSN: 1466-4291